Marketing Simulation Report for the Product PirateEye - Term Paper Example

?MARKETING SIMULATION REPORT Executive Summary The present report is a presentation of the outcome of a marketing simulation, which was undertaken asa brand manager for the introduction of the new product, PirateEye. The marketing simulation was taken on a medium term basis, comprising of six clear years of brand strategies and projections. The major aim that characterized the six year marketing plan is to ensure that at the entry point, the company takes charge of 30% of the existing market and grow this percentage up to a level of 37%. This would involve the sale of 1500 pieces of PirateEye products in a year by the sixth year. To achieve this aim, a number of specific objectives need to achieved, as well as the need to undertake specific marketing obligations. For example, through the report, the target market is identified to be boat owners within the local marine transport business. Within this target group, a segment of smaller boat owners have been identified. One of the consumer behavior identified for this group is that they have demand for high technology security gadgets to detect pirates before the pirates get onboard the ships. There is presently an existing competitor that has monopolized the market. It is for this reason that a number of promotional strategies including the use of discount coupons and reduced sales are suggested as a key strategy in getting new customers. The report also identifies that using direct sale representatives who already work with the boat owners as distributors would have an added advantage of ensuring that rapport between the owners and the company is easily established. Introduction When dealing with a monotonous competitor who has monopolized the market for such a long time, it is very difficult to penetrate the market and make any remarkable impressions. But this could however be made possible in the midst of hard work and dedicated service. It is for this reason that as a brand manager, much time was taken to undertake a detailed marketing simulation to identify the rubrics of the present marine transport market and make necessary impact on the market (Katel, 2011). Presently, there are several service and product providers in the marine transport business. However, not much of these people deliver security systems to boat owners. There is actually only one competitor when it comes to the provision of pirate related security systems. This report therefore presents all possible options to the company to implement in order to ensure that the company achieves its goals for penetrating the current market. The report identifies the market target, the consumer behavior of the identified market, market segmentation, targeting and positions, as well as the appropriate marketing mix to use in other to achieve the goals and objectives set for the company in the next six years. Above all, recommendations are made through out the report to on how competition with the existing competitor can be rigorous and result oriented (Knill, and Tosun, 2008). Evaluation of the Targeted Market The target market referred to in this case are the customers with whom the company may want to do business (Jost, 2003). From this perspective, it can be said that boat owners on the coastal lands of the localized marine industry are the targeted market. This not withstanding, there is even a larger market for the company as the fortunes of globalization and break in corporate borders makes it possible to trade off products to boat owners all over the globe. The demographics of the targeted market are such that there can be two major groups of boat owners found. The first group is those who own larger boats whiles the second group is made up of those who own smaller boats. Currently, the business attention of those who own larger boats is on crude lifting while the business attention of those who own smaller boats is on human transport (quote). With any of these two however, there is a high level of security concern, especially when it comes to the issue of pirate activities. With statistics showing 500 pirate activities in a year, it is just right that the targeted market be approached with the present product as a way of helping in reducing the number of pirate activities. Research indicates that owners of larger boats mostly have guaranteed security because the companies they work for invest so much on security (Billitteri, 2007). However, smaller boat owners who transport humans are at a disadvantage as far as security is concerned. To this end, the attention of the company as far as targeted market is concerned shall be on the smaller boat owners. Market entry goals and objectives The market entry goals and objectives were set specifically based on the product life cycle of PirateEye. It would be noted that the product life cycle goes through four major stages, which are the introduction, growth, maturity and decline stages. These four stages were spread for the six year period of the marketing plan. Subsequently, the first two years shall be the introduction stage, where a market estimate of 30% and 35% of market shares are projected respectively. The pricing of product for the development stage would be the same for the first two years. The pricing was actually pegged using skimming. The target of the development stage is also hoped to be achieved by the use of advertisement as outlined by the Boston Consulting Group matrix. The second stage, which is the growth stage, is going to encompass the third year, where a market share of 37% is going to be set. The maturity stage of the product is set for the fourth and fifth years, where the product is expected to reach a market popularity climax. To this end, it will be expected as per the Boston Consulting Group matrix, publicity and promotion of the product at this point will be self professing. This means that the trust that consumers would develop in the quality of the product will be expected to do more of the sales for the company. Subsequently, at the maturity stage, attention shall be given to internal structural development such as the enhancement of the human capital base of the company. This does not mean however, that the company will decline in sales at the maturity stage. The sixth year is going to be the decline stage where the product is going to be rejuvenated by the inclusion of a number of new features to consolidate the quality of the product. This is expected to increase quantitative sales and so room can be made to reducing the price of the product and continuing to offer loyal niche segment (Lautenbacher and Stidham, 2009). On a closing note, it would be said that these objectives were successfully achieved and the achievement of the objectives was attributed to he minimal pressure from competitors on the market. This is to say that consumers did not have many competitors to take options from and so the product, promotion and price presented to them were seen as highly favorable and so enough patronage was made to aid in realizing the market share goals. Segmentation, Targeting and Positioning of Market The goals and objectives that have been set are in relation to a specified market segmentation, target and positioning. Without this, the objectives cannot be trusted to be specific and measurable (Mair, 2008). As far as the segmentation of the market is concerned, there are no confined demographic boundaries. However, the geographic segmentation, which normally identifies consumers according geographic criteria such as states, regions and neighborhoods, is used (Gallego and VanRyzin, 2004). It is within this segment that the marine transport owners of the local coastal area are identified. In fact the segment is reduced further down to a target of smaller boat owners. Among these owners, a combination of business to business and business to consumer transactions are done to determine the most appropriate price of product, cost of advertisement, sales force expenditure, fixed costs, variation cost, among other fiscal calculations are made using the simulation. According to the business to business model of commerce transactions, the company is expected to have a lot of relay business encounters with other businesses before the final product can be completed (Kelton, et al. 2004). In the case of PirateEye, such business to business transactions exist for the market force. For example, for the product to get to the consumer, the services of distributor companies are employed. What is more, part of the expenditure goes to advertising companies and promotions. The business to business transaction has been the basis for positioning the market, a relation between the general expenditure such as advertising, sales force, trade promotion, consumer promotions, fixed costs, variable costs, and unit variable costs have all been put into consideration in determining the unit price of the product as $3,000. With a market price of $3,000, the PirateEye is expected to be one of the most affordable marine transport security devices on the market and this is going to command a very strong position on the market in terms of pricing. Consumer Behavior Analysis Behavior of the consumer who is identified as the smaller boat owner may be analyzed in a number of ways. But more specifically, the behavior of the customer towards purchases of products is analyzed. In the first place, the consumer is one who has taste and admiration for quality. This is perhaps from the fact that the existing competitor has had the strength of maintaining its level of quality. To this end, consumers always look for high quality boat products, even with those that are not directly concerned with security of the boats. What this means for the company is that its aim of producing high quality security surveillance systems to detect pirates even before they get on board boats cannot be compromised (Koch, 2000). What is more, the consumers have a behavior of settling for the least priced products that can meet their demands and wants. What this means is that as much as they desire for quality, they would want quality for less. With the current price of one of the PirateEye pegged at $3,000, it is expected that the consumers would find this as highly competitive as the existing competitor offers some systems that are far above this cost. Finally on the consumer behavior, it is observed that the consumer is one who would always look for new products that can satisfy their needs. This means that if the standards of the product are not maintained, chances are that the market share of the company would be lost to others (Kelton, et al. 2004). Competitive Analysis to existing Competitors There is currently only one key competitor in the name of Hendrics Model. This competitor has had a monopoly over the market for such a long time and this has led to the creation of very suitable brand equity for it. What is more, the competitor has for long lived within the means of meeting the quality levels desired by consumers. These are basically the strengths that the existing competitor possesses. There could however be a threat for the competitor if a new entrant comes in with a marketing mix that presents lower prices and better promotions than he currently uses. This is because the consumer behavior analysis has really established that the consumer is someone who desires so much for cheaper products. Having looked at the strengths of the existing competitor, its weaknesses could also be found in its backroom staff, whereby the current demand on it makes it difficult for it to have focus on administrative empowerment. Most often than not, studies have showed that consumers are not presented with the best of csutmer service and satisfaction due to the monopoly of the market (Lautenbacher and Stidham, 2009). In the midst of this weakness, the company has an opportunity to improve on its lots by committing a larger percentage of its curren revenue into the training of its human resource base. The marketing Mix As applicable in marketing theories, four major aspects of the market are looked at in terms of the marketing mix. In terms of product, it has been established that quality must be the only hallmark with which the existing market can be penetrated. as much as possible, the quality presently available on the market must be exceeded and this can be achieved by the introduction of new and sophisticated features that make the hacking of the product simply impossible. In terms of promotions, customer appreciation promotions such as the use discount tickets and reduced sales are recommended. What is more, at the decline stage of the product lifecycle, prices of the products should be reduced drastically across board without any hesitation. Despite the existence of the promotion, it is still recommended that prices of products would be as minimal as possible. Whiles this is suggested, the expenditure awaiting the company for the various years must not be overlooked. That is, prices must not be set such that they would result in eventual losses for the company. Finally, the place of presentation should be incorporated in the business to business client system whereby the company would employ the services of distributors who are already in the market to get products to the door step of consumers. This not withstanding, the advertisement plans made should be adhered to because it is when the product is well publicized that distributors can be guaranteed of a ready market, with which they would continue to make demands from the company (Kelton, et al. 2004). REFERENCE LIST Billitteri, T. J. 2007. Marine Transport Outlook: Congressional Quarterly Research, 17(31), 721-744. Gallego, G and VanRyzin, G. A. Multiproduct Dynamic Pricing Problem using Its Applications to Network Yield Management. Operations Research, Vol. 45, No 1, 2007. Jost, K. 2003. Traveler’s Safety Rights and Security Issues Congressional Quarterly Research, 3(15). Retrieved from http://library.cqpress.com.ezproxy1.lib.asu.edu/cqresearcher/document.php?id=cqresrre1993042300&type=hitlist&num=13 Katel, P. 2011. Marine Transport: Are Threats of Pirates surmountable? Congressional Quarterly Research, 21(38), 901-928. Kelton, D, Sadowski, R and Sadowski, D. 2004, Simulation with Arena. New York, NY: McGraw-Hill, Kesselman, M., Krieger, J., & Joseph, W. A. 2012. Introduction to comparative politics (2nd ed.). Boston, MA: Wadsworth. Knill, C., & Tosun, J. 2008. Policy Making. In D. Caramani (Ed.), Comparative politics (pp. 495-519). Oxford, UK: Oxford University Press. Koch, K. 2000. Child poverty: Did welfare reform help poor children? Congressional Quarterly Research, 10(13), 281-304. Lautenbacher, C and Stidham, S. The Underlying Markov Decision Process in the Single-Leg Airline Yield Management Problem. Transportation Science, Vol. 33, No 2, 2009. Mair, P. 2008. Democracies. In D. Caramani (Ed.), Comparative politics (pp. 108-132). 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